Rehab lawsuits expected

Newport Beach officials estimate it will cost about $326,000 in short-term costs to implement a new ordinance aimed at clamping down on drug and alcohol rehabilitation homes in the city and about $492,000 annually to enforce the new rules, according to city documents.

Although some of the cost will be offset by use permit fees the city plans to charge rehabilitation home operators, the city could end up spending even more in legal costs. Rehabilitation home operators claim the new rules are discriminatory.

“They [rehabilitation home operators] are going to say that the ordinance changes their status to make it more difficult for them to operate,” said attorney Jim Markman, the city’s special legal counsel on the rehabilitation home issue. “My answer is, if we can’t claim that, then there’s going to be nothing a city can do.”

Residents who claim the new rules are too little too late to curb what they say is an over-concentration of rehab homes in the city have already named Newport Beach in a $250-million lawsuit. City officials have said they also expect one or more rehabilitation home operators to challenge the new ordinance in court.

Officials from Sober Living by the Sea, which runs about half of the city’s rehabilitation homes, have said numerous times they plan to challenge the new rules in court.

But for now, Sober Living has no choice but to apply for the proper permits the city requires as part of the new rules, said John Peloquin, vice president of operations for CRC Health Group, which owns Sober Living by the Sea.

“At the end of the day, we do believe the ordinance is discriminatory and we intend to challenge it, but we are going to have to abide by the ordinance until we can get a final solution,” Peloquin said.

The ordinance, which will go into effect Feb. 20, will require most homes get use permits to remain open and will subject the homes to a public hearing process to gain approval. Newport Beach is sending out letters to rehabilitation home operators with applications for use permits, said Assistant City Manager Dave Kiff. The operators have 90 days from Feb. 20 to fill out and return the application. Kiff said he has already handled questions from a few of the rehabilitation home operators on the use permit process.

The city is working to contract short-term workers to process the use permit applications, Kiff said. Newport Beach also is in the process of looking for a hearing officer to approve or deny the homes’ applications for use permits. Among the requirements for the job, the officer would have to have at least three years experience as a judge, a practicing attorney familiar with municipal law or a hearing officer for another city.

BRIANNA BAILEY may be reached at (714) 966-4625 or at [email protected].